(AFP) Posted Wednesday February 1, 2012– 11:30am

Less than two years after a government-backed bankruptcy, iconic US automaker Chrysler on Wednesday posted its first annual profit and vowed to keep the money pouring at an even faster pace.

Chrysler's remarkable success at the hands of Italy's Fiat comes after failed marriages to German's Daimler and private equity group Cerberus and years of painful restructuring.

Chrysler's full year net income rose to $183 million from a $652 million loss in 2010, thanks to fourth quarter earnings of $225 million.

Chrysler forecast that net income would jump to around $1.5 billion in 2012 as revenues rise to $65 billion from $55 billion in 2011 and $42 billion in 2010.

"The house is in good order. We are proud of the work we've done," said Sergio Marchionne, chairman and chief executive of Chrysler and Fiat.

"Now we greet a new year of high expectations with our heads down, forging ahead and focused on executing the goals we've set for ourselves as a company."

Chrysler has also proven to be a sound investment for Fiat, which in 2011 looked to the US automaker for every penny of its fourth quarter net profit as a result of deep declines in the European market.

Fiat obtained a 20 percent stake in the new Chrysler in exchange for sharing technology and offering its leadership, and has since spent $2 billion to boost its stake to 58.5 percent.

Marchionne said he expects Fiat to obtain the remaining 40 percent from a trust fund set up to pay retiree health care costs by 2016, but repeated his assertions that financial markets are too unstable for an initial public stock offering any time soon.

He also said Fiat's "nonsensical" reliance upon Chrysler for profits cannot continue, and blamed widespread overcapacity in the European automotive industry and the refusal of unions to negotiate more flexible contracts for the losses.

"Somebody's better get off their butts and just snap up to the grid, because we're not pulling the car here," Marchionne said.

"Everybody else has got to realize that being European doesn't entitle them to be economically inefficient."

While a radical reduction of Chrysler's break-even point contributed to the profits, a massive onslaught of well-received products drove its success.

Chrysler has posted 22 consecutive months of sales gains in the key US market, and the past eight months have seen growth that came in at 20 percent or higher.

Chrysler said it expects global sales to grow to 2.3 to 2.4 million vehicles in 2012 from 1.9 million in 2011 and 1.5 million in 2010.

Half of that gain is expected in the United States, where Chrysler hopes to increase market share by a point in a growing market.

Chrysler's US sales grew 26 percent last year and its market share rose 1.3 points to 10.5 percent.

That success allowed Chrysler to pay down its debts to the US and Canadian governments six years earlier than planned, which resulted in a $551 million charge in the second quarter.

Marchionne said the real impact on profits, however, will come in 2013.

"2012 for us is a transition year in the sense that we're finalizing a number of costs that are associated with the significant raft of product introductions and rejuvenations of 2013," Marchionne said in a conference call.

"The real story is going to unfold in 2013 and it's going to start with the Detroit auto show a year from now."

The last time Chrysler reported a full-year net profit was in 1997, when it racked in $2.8 billion prior to its merger with Daimler.

Daimler did not report net income figures for Chrysler, which posted whopping operating losses beginning in 2006.

"Chrysler is the surprising comeback kid -- again," said Edmunds.com analyst Michelle Krebs.

"When Chrysler emerged from bankruptcy, there were plenty of skeptics, but the automaker has proven them wrong," she added.

"Since detailing its plan for the future in November 2009, Chrysler has done everything it said it would, creating an impressive recent track record and providing confidence that it will meet its 2012 goals."

Copyright © 2012 AFP

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